International Journal of Research in Business

Management (IJRBM)
Vol. 1, Issue 1, June 2013, 11-18
© Impact Journals

INDIAN PROCESSED FOOD: RECENT TRENDS AND FUTURE PROSPECTS

RINA DAVE & ANKUR AMIN

Assistant Professor, SEMCOM College, Sardar Patel University, V. V. Nagar, Gujarat, India

ABSTRACT

India is fast emerging as a sourcing hub of processed food. India's food processing sector includes fruit and
vegetables; spices; meat and poultry; milk and milk products, beverages, fisheries, plantation, grain processing and other
consumer product groups such as confectionery, chocolates and cocoa products, soya-based products, mineral water, high
protein foods etc. Dairy Industry is also growing. Government has implemented various schemes to promote at the same
time favorable Exim policy is also benefiting equally. It is in the unorganized segment. Government should give more
support and should more formalize it. It has export potentials. Food processing sector is indispensable for overall
development of an economy as it provides a vital linkage and synergy between the agriculture and industry. It helps to
diversify and commercialize farming; enhance income of farmers; create markets for export of agro foods aswell as
generate greater employment opportunities.

KEYWORDS: Industrial Policy, Food Processing, Agriculture Based Industry

INTRODUCTION

The food processing sector is highly fragmented industry, it widely comprises of the following sub-segments:
fruits and vegetables, milk and milk products, beer and alcoholic beverages, meat and poultry, marine products, grain
processing, packaged or convenience food and packaged drinks. It is in the unorganized segment. This segment accounts
for more than 70% of the output in terms of volume and 50% in terms of value. Though the organized sector seems
comparatively small, it is growing at a much faster pace.1 The Indian food services industry is estimated to be nearly worth
Rs 75,000 crore (US$ 13.77 billion) and is growing at a healthy compound annual growth rate (CAGR) of 17 per cent,
according to a Franchise India report released at the Indian Restaurant Congress. It is expected to reach Rs 1,370 billion
(US$ 25.16 billion) by 2015. "In the future, the organised market is expected to grow even faster - at around 20 to 25 per
cent per annum," according to MrGauravMarya, President of Franchise India.

RESEARCH METHODOLOGY

An attempt is made to give an overview on Indian food processing industry. Indian Dairy industry’s export
potentials are also examined with help of following objectives.

OBJECTIVES

 To examine profile of Indian Food Processing Industry.

 To examine growth of dairy product in India.

 To evaluate exports of processed food.

Food Processing Industry

With a vast agriculture sector, abundant livestock, and cost competitiveness; India is fast emerging as a sourcing
12 Rina Dave & Ankur Amin

hub of processed food. India's food processing sector includes fruit and vegetables; spices; meat and poultry; milk and milk
products, beverages, fisheries, plantation, grain processing and other consumer product groups such as confectionery,
chocolates and cocoa products, soya-based products, mineral water, high protein foods etc. India’s contribution estimated
worth US$ 121 billion in India’s contribution in world business made India on 13th number. It is one of the largest
industries in India, and is ranked fifth in terms of production, consumption and exports.

Turnoverwise

Table 1
Legend Turnover No of Cos
0-10 Crs 41
10-100 Crs 16
100-250 Crs 7
250-500 Crs 4
500-1000 Crs 8
1000-2500 Crs 10
2500-5000 Crs 3
5000+ Crs 0
Not
2
Applicable

0-10 Crs
No of Cos 10-100 Crs
100-250 Crs
250-500 Crs
500-1000 Crs
1000-2500 Crs
2500-5000 Crs
5000+ Crs
Not Applicable

Sources: www.fundoodata.com
Figure 1

Table 2
Legend Sector No of Cos
Private Sector 84
Public Sector 6
Govt Sector 1

Sector Wise

No of Cos
Private Sector
Public Sector
Govt Sector

Sources: www.fundoodata.com
Figure 2
Indian Processed Food: Recent Trends and Future Prospects 13

Table 3
Legend City No of Cos
Mumbai 11
Bangalore /
1
Bengaluru
Pune 7
Hyderabad 6
Chennai 1
New Delhi 14

Mumbai
No of Cos
Bangalore /
Bengaluru
Pune

Hyderabad

Chennai

New Delhi

Sources: www.fundoodata.com
Figure 3
Entity Wise Profile

Table 4
Legend Co Entity No of Cos
Public Ltd
8
Cos - Listed
Public Ltd
29
Cos - Unlisted
Pvt Ltd Cos 33
Others 21

No of Cos
Public Ltd Cos -
Listed
Public Ltd Cos -
Unlisted
Pvt Ltd Cos

Others

Sources: www.fundoodata.com
Figure 4
14 Rina Dave & Ankur Amin

Industry Best

Table 5

Andhra Pradesh Dairy

Bhole Baba Dairy Calibre Chemicals
Ace International LLP Development Cooperative
Industry Ltd Pvt Ltd
Federation Ltd(Vijaya)
Creamline Dairy
Carol Info Services Ltd Chitale Group Delhi Milk Scheme
Products Ltd
Dwarka Group of
DS Group (DharampalSatyapal Enhance Proteins
Dodla Dairy Ltd Companies ( Dwarka
Ltd) Ltd (Mahaan)
Milk )
Gopaljee Dairy Foods Hangyo Ice Creams
GRB Dairy Foods Pvt Ltd
Pvt Ltd Pvt Ltd
Sources: www.fundoodata.com

MNC

Table 6

Maez One Group Pvt Ltd(Red

Cadbury India Ltd ( Mondelez ) UniColloidsImpexPvt Ltd
Mango)
Sources: www.fundoodata.com

SMEs

A. Arunachalam& Company
CHARBHUJA Industries
Pvt Ltd
Cosmic Kitchen Pvt Ltd
Devashree Foods Pvt Ltd Dhiman Food Pvt Ltd
Sources: www.fundoodata.com
Table 7
Anuj Dairy Pvt Ltd
Chocoalacarte
Dairy Craft India Pvt Ltd
Chanakya Dairy
Celeste Chocolates
Products Ltd
Chocohouse Choudhery Cheese
Chocolatiers Bazar Pvt Ltd
Dairy Ice Cream &
Dairy Tech India
Frozen Foods Pvt Ltd
Exito Gourmet Pvt Ltd

The export of fruits and vegetables from India, including processed food items, have registered a growth of 24 per
cent in terms of value to record Rs 8,241 crore (US$ 1.51 billion) in 2011-12 as compared to Rs 6,638 crore (US$ 1.22
billion) in the previous fiscal year. India is the world's largest milk producer, accounting for around 17 per cent of the
global milk production, according to RNCOS research report titled, 'Indian Dairy Industry Analysis'. The food processing
industries attracted foreign direct investments (FDI) worth US$ 1,661.85 million between April 2000 to September 2012,
according to the latest data published by Department of Industrial Policy and Promotion (DIPP).

Total size of food-processing industry is around US $40 billion growing at 10% and the size of processing sector
is estimated to be US $2.53 billion. Food-processing industry is significant for India’s development because it has
important link and synergy with industry and agriculture, the two main support of the economy.The industry is mainly
unorganized with 75% of the processing units belonging to the unorganised category, the organized category though small,
is growing fast. The food production is expected to double in the next 10 years and the consumption of value added food
products is expected to grow at a much faster pace. This growth will benefit the economy, increase agricultural yields,
create employment and raise the standard of living of various associated people.

The total inflow of foreign direct investment (FDI), year-wise, in food processing sector during the period 2000-
01 to 2007-08 (upto November 2007) is as follows:
Indian Processed Food: Recent Trends and Future Prospects 15

Table 8

Foreign Direct
Year Investment
(Rs. in Crores)
2000-01 198.13
2001-02 1036.12
2002-03 176.53
2003-04 510.85
2004-05 174.08
2005-06 182.94
2006-07 441
2007-08 (upto
November 61.63
2007)
Grand Total 2781.28
(Source: Annual Report 2007-08, Ministry of Food Processing Industries)

Segmentation of Different Sectors in Food Processing Industry

Table 9

Dairy Whole milk powder, skimmed milk powder, condensed milk, ice cream,butter and ghee, cheese
Fruits and Beverages, juices, concentrates, pulps, slices, frozen and dehydrated products, potato wafers,
vegetables potato chips
Grains and Fisheries Frozen and canned products
cereals Meat and poultry Frozen and packed products, egg powder
Consumer foods Snack food, namkeen, biscuits, ready-to-eat food, alcoholic and nonalcoholic beverages

Sources: http://mofpi.nic.in
Figure 5

Source: FAIDA/Ministry of Food Processing Industries

Figure 6
16 Rina Dave & Ankur Amin

Dairy Industry in India

India now has indisputably the world's biggest dairy industry—at least in terms of milk production; lastyear India
produced close to 100 million tons of milk, 15% more than the US and three times as much as the much-heralded new
growth champ, China. Appropriately, India also produces the biggest directory or encyclopedia of any world dairy
industry. The dairy sector in the India has shown remarkable development in the past decade and India has now become
one of the largest producers of milk and value-addedmilk products in the world.

Leading Dairy Products Brands

Amul, Vijaya, Verka, Vadilal, Kraft, Britannia.

Table 10
Market Growth Rates
1990-91 – 1996-97 18.50%
1996-97 – 2001-02 20.60%
2001-02 – 2006-07 11.70%
2004-05 – 2009-10 9.40%
2009-10 – 2014-15 7.40%

The market growth rate for dairy products was increased in the year 1996-97 to 2001-02.After 2002 the market for
dairy products declining.

Product: Dairy spreads (04052000)

Table 11
2009-10 2010-11 2011-12
Country Qty Value Qty Value Qty Value
NEPAL 5,266.00 10,24,439.00 5,000.00 9,47,225.00 374 43,123.00
GHANA 0 0 0 0 100 17,831.00
EGYPT ARAB
0 0 0 0 50 5,075.00
REPUBLIC
NEW ZEALAND 0 0 382 62,769.00 0 0
AUSTRALIA 0 0 400 64,485.00 0 0
HONG KONG 110 8,926.00 778 1,06,487.00 0 0
Total 5,376.00 10,33,365.00 6,560.00 11,80,966.00 524 66,029.00
Source: http://agriexchange.apeda.gov.in

Above table reveals that Dairy Spreads Nepal, Ghana, Egypt New Zealand, Australia and Honkong increased
gradually.

Dairy products exports in top 10 countries

Table 12
2009-10 2010-11 2011-12
Country Qty Value Qty Value Qty Value
UNITED ARAB
49,88,236.00 7,064.49 58,45,355.00 9,479.37 40,36,082.00 9,365.33
EMIRATES
NEPAL 24,29,023.00 3,659.05 30,58,701.00 4,403.21 1,20,02,660.00 3,502.68
SINGAPORE 35,97,883.00 1,879.16 25,60,663.00 1,969.75 30,62,655.00 2,597.16
Indian Processed Food: Recent Trends and Future Prospects 17

Table 12:Contd.,
OMAN 3,86,370.00 581.96 7,48,005.00 1,356.89 6,72,525.00 1,776.86
EGYPT ARAB REPUBLIC 8,64,436.00 891.91 36,47,350.00 6,643.98 8,07,340.00 1,636.23
AUSTRALIA 4,81,428.00 762.86 7,38,770.00 1,016.87 7,58,922.00 1,569.89
SAUDI ARABIA 15,56,586.00 2,131.25 10,79,613.00 1,570.59 4,65,703.00 1,158.80
UNITED STATES 6,22,390.00 959.67 6,54,446.00 1,068.88 5,24,786.00 1,111.40
QATAR 3,43,489.00 559.39 4,33,168.00 752.17 4,55,207.00 1,065.66
KUWAIT 6,12,722.00 942.44 5,33,016.00 1,043.25 4,08,259.00 942.46
Source: http://agriexchange.apeda.gov.in

India’s exports in United Arab Emirates was increased 2010-11 but consecutive years it declined. The same was
incase Nepal, Oman and Egypt. Australia, United States ,Quatar found increased from 2009-10 to 2011-12.

CONCLUSIONS

To conclude it can be said that India has a strong agricultural production base with diverse agro-climatic
conditions and arable land of 184 million hectares. It is one of the major food producers in the world and has abundant
availability of wide variety of crops, fruits, vegetables, flowers, live-stock and seafood. As per the available information, it
produces annually 90 million tons of milk (highest in the world); 150 million tons of fruits and vegetables (second largest);
485 million livestock (largest); 204 million tons of food grains (third largest); 6.3 million tons of fish (third largest); 489
million poultry and 45,200 million eggs. As a result, Indian food processing industry has become an attractive destination
for investors the world over. Processed food exports also increased from2010-11. Dairy Industry too have become an
important aspect. Dairy Industry is also growing. Government has implemented various schemes to promote at the same
time favorable Exim policy is also benefiting equally. Further efforts should be made to channelize it and there is huge
export potentials. Concentrated efforts would definitely give more fruits.

REFERENCES

1. http://mofpi.nic.in/

2. http://www.indiainbusiness.nic.in

3. http://agriexchange.apeda.gov.in

4. http://www.apeda.gov.in

5. www.fundoodata.com

6. Department of Industrial Policy and Promotion

7. Ministry of Food Processing Industries